Fix the system: A forestry critic says we must move toward a model for softwood lumber that is truly
market-based
where logs are auctioned locally and sold at the highest price
Copyright 2001
The Vancouver Sun
August 31, 2001
EDITORIAL by Mitch Anderson
The softwood lumber war is not going well. That's a big problem for British Columbia. Not only has the United States government imposed a 19 per cent duty on Canadian lumber imports, but many of the Eastern provinces seem to be cutting themselves loose from the westernmost renegade in the woods.
And who can blame them? With the stakes so high, who wants to take the rap for the systematic abuses by B.C. forest companies and the shockingly low stumpage rates the provincial government charges for logging on Crown land? B.C.'s situation is not pretty. A recent report by Sierra Legal Defence Fund showed that in a 21/2-year period alone nearly one-third of the logging in B.C.'s Interior generated only $10 per truckload revenue to the taxpayer. To picture the volume of wood sold by the B.C. government at this shockingly low rate, visualize enough trucks to stretch end to end from the Yukon border to the tip of South America.
During that same period, companies such as International Forest Products acknowledged that they routinely engaged in a questionable practice called grade setting, a way of lowering stumpage rates by logging low-quality wood first. This generated enormous savings to Interfor and a host of other large forest companies -- an estimated $138 million. But it cost provincial taxpayers dearly.
Companies were able to grade set with impunity, in part because Victoria transferred the responsibility for determining the tax paid for logging on public land from public employees to the logging companies themselves -- a policy shift that made as much sense as trying to save money by firing the tax collectors. No wonder other provinces regard B.C. as a softwood liability.
And a liability B.C. will remain until it does the right thing and overhauls its antiquated stumpage and tenure system, a system that provides too many benefits to corporate shareholders, but nowhere near the corresponding return to workers or the environment as the continuing closure of sawmills and the loss of remaining old-growth forest attests.
The underlying problems with B.C.'s stumpage system are nothing new. For years, major corporations have turned high-grade logs from public lands into low value commodities such as two-by-fours, particleboard and chips. The reason Japan and others pay so much more for our logs is that they do more with them. They revere our wood. They optimize its use. And in the process, they generate a lot more jobs than we do here at home.
We need to take a page out of their book. We need to embrace value not volume as a key to economic and environmental success.
To achieve that, we must move toward a model that is truly market-based, where logs are publicly auctioned locally and sold at the highest price. This model was used in Vernon, in a pilot project run by the ministry of forests for the last seven years. The result? Victoria collected over 2.5 times more revenue by selling small parcels of logs through open auction rather than selling whole parcels of forest to individual companies.
An added benefit in Vernon was that much of the logging associated with the yard was selection logging. This translated into greater environmental protection in addition to more jobs per unit of wood logged. At the urging of major forest companies, the government never supported expanding that model. Their gain is our loss.
Why are some companies so resistant to competing for wood on the open market? Likely because they know that someone making guitars or cabinetry will pay more for high-grade logs than a company making particleboard or dimensional lumber. Our value-added sector needs nurturing and support. To do that we need more logs available in the local -- not the global -- marketplace.
Such a model would begin to address problems with our southern neighbours. The imposition of duties by the U.S. will be very painful, not for government bureaucrats, but for the forest workers and communities throughout B.C. who will pay the price for years of government inaction on this issue. A simple way to solve this longstanding dispute is to auction at least a portion of our wood in fair and transparent markets with the prices paid there setting stumpage rates elsewhere.
Big forest companies won't welcome such a move, but the vast majority of British Columbians will because it holds promise of delivering greater social, economic and environmental benefits. And who would argue with that, particularly when we're talking about a resource that we, the people, own?
It's time the government did the right thing, and remembered it is the people, not the companies, that they work for.
Mitch Anderson is co-author of Stumpage Sellout, a recent Sierra Legal Defence Fund report chronicling how B.C. forest companies avoid paying hundreds of millions of dollars in stumpage fees.